Tech execs take dim view of current state economy, but optimistic about year to come

Wisconsin technology executives responding to the third-quarter 2010 WisBusiness.com Tech Leaders Survey continue to believe the state’s economy is in poor shape, but expressed growing optimism about the prospects for economic improvement during the next year. Click here to read a Wisconsin State Journal story.

Fifty-one percent of those industry executives who responded to the third-quarter 2010 survey believe economic conditions in Wisconsin will get better during the next year, a 10-percentage-point increase from the prior quarter.

Despite increased optimism about the future of the state’s economy, survey respondents continue to view the state’s economy as either poor or fair. In the third quarter, 15 percent of respondents rated the state economy as poor, compared to 12 percent in the previous quarter and 20 percent in the third quarter of 2009.

Sixty-nine percent rated the state’s economy as fair, unchanged from the prior quarter and only four percentage points higher the same quarter of last year. Nearly 16 percent of survey respondents rated the state’s economy as good, largely unchanged from the prior quarter and the same quarter of 2009. None of those who responded to most recent survey rated the state’s economy as excellent.

The 51 percent of respondents who said they believed the state’s economy will get better in the coming year compares to 41 percent a quarter ago and more than 55 percent a year ago. The number of executives who believe the state’s economic condition will stay the same during the next 12 months decreased more than six percentage points to 41 percent. Nearly eight percent of survey respondents believe the state’s economy will get worse during the next year, a decrease of four percentage points from the previous quarter and three percentage points from the third quarter of 2009.

“Respondents to the most recent Tech Leaders Survey expressed renewed optimism about the prospects for economic recovery in Wisconsin,” said Tom Still, president of the Wisconsin Technology Council. “As we have seen in past survey results, however, this optimism has not been sustained easily, as economic conditions have remained difficult. One thing remains relatively constant in our results, however. Entrepreneurs across Wisconsin continue to express the confidence in the prospects for their own companies that is helping to drive growth, even in difficult times.”

Prospects for own company

Less than a quarter (23.5 percent) of the executives who responded to the most recent survey rated the overall prospects for their company as excellent, a slight, two-percentage point decline from the prior quarter, but an increase of more than six percentage points from the same period of last year. Nearly 47 percent of those who responded to the survey rated the overall prospects for their own companies as good, largely unchanged from last quarter, but a decline of more than eight percentage points from the same quarter of last year. Twenty-two percent rated those prospects as only fair and 6.5 percent rated them as poor.

Sixty-four percent of the executives who responded to the most recent survey believe things will get better for the company they run during the next year, unchanged from the prior quarter and a decrease of nearly seven percentage points from a year ago. More than 32 percent said things will stay the same for their company during the next 12 months, an increase of nearly seven percentage points from the third quarter of 2009. Two-and-a-half percent said things will get worse during the next 12 months.

Industry condition

Executives in Wisconsin’s advanced manufacturing industry who responded to the most recent survey continue to rate the condition of their industry as worse than executives in the other three sectors do. Nearly 80 percent of advanced manufacturing executives continue to rate the condition of their industry as only fair, an increase of four percentage points from the previous quarter and of 20 percentage points from the year-ago quarter.

Biotechnology and medical device executives continued to rate their industry more highly than the executives from other industries who responded to the survey. More than 42 percent of biotech and medical devices executives who responded to the most recent survey rated the condition of their industry as good, a decrease of five percentage points from the second quarter of 2010, but an increase of nearly seven percentage points from the same quarter of last year. Nearly 69 percent of clean tech and ag-bio executives who responded to the survey rated the condition of their industry as only fair, while 17 percent rated the condition of their industry as good, a decline of seven percentage points from the previous quarter and of nearly four percentage points from the third quarter of 2009.

Almost 59 percent of those info tech executives who responded to the survey rated the condition of their industry as only fair, an increase of 11 percentage points from the second quarter of 2010, but largely unchanged from a year ago. More than 33 percent of info-tech executives rated the condition of their industry as good.

More than 45 percent of those who responded to the survey said the condition of their industry will get better during the next 12 months, a three-percentage-point decline from the second quarter of 2010 and five-percentage-point decline from a year ago. Fifty percent said their industry would stay the same during the next year. Four percent believe the condition of their sector will get worse during the coming year.

Availability of capital

Technology industry leader perceptions about the availability of capital remained largely unchanged from the previous quarter. More than 42 percent of the industry leaders who responded to the survey rated the availability of capital as only fair, an increase of six percentage points from a year ago. Another 39 percent rated the availability of capital as poor, a decline of three percentage points from a year ago. Fifteen percent rated it as good, a four-and-a-half-percentage-point decline from the third quarter of 2009.

The percentage of those survey respondents who believe the availability of capital will get better during the next 12 months was largely unchanged from the previous quarter. Twenty-four percent of those who responded to the most recent survey said the availability of capital will get better during the next year. Nearly 72 percent of respondents to the second-quarter survey believe capital availability will stay the same during the next year, an increase of seven percentage points from the previous quarter and an increase of 12 percentage points from a year ago. Four percent believe capital availability will get worse during the next 12 months, decline of more than seven percentage points from the second quarter of 2009 and a four percent decrease from the prior-year quarter.

About the WisBusiness.com Tech Leaders Survey

The WisBusiness.com Tech Leaders Survey is a quarterly, statewide survey of senior executives in the information technology, biotechnology and medical device, advanced manufacturing, and clean technology and agricultural biotechnology industries. It measures the executives’ ratings on four key business indicators, including the condition of the state’s economy, their industry, their company and the capital markets. The survey is a project of the Wisconsin Technology Council, WisBusiness.com and the Luminis Group, Ltd. The survey questionnaire is administered by e-mail and Web-based survey technology. This quarter’s survey was fielded from Sept. 27-Nov. 8, 2010 (n=166, 21 percent response rate). Respondents represent a geographic, developmental and disciplinary cross-section of the state’s technology industry. The survey is conducted by the Luminis Group, Ltd., Madison, Wis., using generally accepted methodology, including non-biased question wording and order, response category randomization, where appropriate, and uncompensated respondent participation.

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